From Maxwell Perspective...

Breaking the Ice

In advance of President Obama’s well-publicized trip to Alaska, two Maxwell professors were invited to advise stakeholders on shipping-channel icebreakers.

 
David Van Slyke (left) and Sean O’Keefe at the Anchorage summit that preceded the President’s visit.

In late summer, Barack Obama traveled to Alaska to address climate change and commerce, while attending the GLACIER Conference in Anchorage. He announced steps intended, according to the White House, “to accelerate the acquisition of additional icebreakers to ensure the United States can operate year-round in the Arctic Ocean.”

Like many presidential visits, Obama’s Alaska trip served to draw attention to a large set of questions that the local community and other stakeholders in the Alaskan Arctic have been debating for years — much of it boiling down to economic opportunity versus environmental impact. In fact, just two weeks before Obama’s visit, public leaders from Alaska (e.g., the governor) and similarly impacted regions (e.g., the president of Iceland), along with representatives of the business community, gathered in Anchorage for “The Alaskan Arctic: A Summit on Shipping and Ports,” a three-day conference. Leading experts in the fields of shipping, security, and government acquisition gathered to discuss and begin developing reliable shipping partnerships throughout the Alaskan Arctic.

At the center of the conversation were icebreakers — large, complicated vessels that cut paths for other ships through ice pack — and the United States’s recommended acquisition of one or more. Among experts called to inform on this question were Maxwell faculty members David Van Slyke and Sean O’Keefe, who presented their analysis on procurement models.

“Smuggling tells us how people feel about America’s relation to the world.”
— University Professor Sean O’Keefe

Their research — done with Zachary S. Huitink, a doctoral student in public administration at Maxwell, and Trevor L. Brown, a professor at Ohio State University — demonstrates that the Arctic is at the center of economic and research possibilities. It holds approximately 30 percent of the world’s undeveloped natural gas and mineral resources, valued at more than $1 trillion.

Van Slyke is Maxwell’s Louis A. Bantle Chair in Business and Government Policy and a nationally recognized expert in acquisition alternatives — that is, innovative, efficacious ways government should make its big purchases. O’Keefe, a Maxwell alumnus, former head of NASA, and recent aerospace industry executive, is a University Professor and Phanstiel Chair in Strategic Management and Leadership. They were sought out by the Arctic Circle Shipping Task Force and the University of Alaska. 

Their analysis demonstrates that, compared with other nations active in the Arctic, America has fallen behind in economic growth and security — due largely to this nation’s shortage of active, operational icebreakers. The Russian Federation’s fleet currently has 40 operational icebreakers; the U.S. fleet, only five. 

Why? The main reason is that the price of an icebreaker, more than $1 billion, challenges the processes of public procurement. Van Slyke and O’Keefe presented four alternative strategies, ranging from a retrofit of existing assets to new or broadened partnerships with private firms, other government agencies, or other nations. All the options they presented have been used by other government agencies, creating precedent.

“Each model proposed has attendant advantages, depending on the other challenges to be considered,” says O’Keefe. “But the most efficient business model incorporates best business practices.” He favors a lease/charter approach. Van Slyke’s research points toward the advantages of public-private partnership, through which an agency uses an asset (e.g, an icebreaker) on a cooperative basis to lower costs.

According to the professors, the conference demonstrates tangible ways scholarship serves public ends. “We were happy to give them options to talk about,” says Van Slyke, “with the expectation that we helped create a space for dialogue and debate.”

“The most rewarding aspect of academic research is how it can be applied to inform debate,” O’Keefe adds. “We help inform varied individual community interests and forge consensus around alternatives to serve the public good.”

— Gabriela Luciano

This article appeared in the fall 2015 print edition of Maxwell Perspective; © 2015 Maxwell School of Syracuse University.